What Is Federalism?

At its heart, federalism is about power sharing. It is a system of government where power is divided and shared between a national government and regional governments. The US Constitution articulates some parameters of the relationship between states and the federal government but leaves ample room for ambiguity and debate. First, before engaging in the nuance of American federalism, it is perhaps easiest to understand federalism by comparing it with other systems of government.

First, a unitary system of government is an institutional arrangement where power is centralized within the national government. State and local governments possess very limited independent power. National governments give or specify what type of powers are available to state and local governments. Current examples of unitary governments include China, Cuba, France, and Israel. Historically, this model of government is most common as autocracies (rule by a single individual such as a monarch or dictator) and oligarchies (rule by a small group such as the military, religious leaders, or wealthy individuals) tend to concentrate power at the national level rather than share it.

A confederate or confederal system of government is an institutional arrangement that concentrates the majority of power at the state or subnational level. These local governments hold supremacy over the national government in all areas unless explicitly enumerated otherwise. In the United States, the country adopted a confederate model during the Articles of Confederation, and the Southern states utilized this model when forming the Confederated States of America during the Civil War. Switzerland is perhaps the most common example of a long-lasting confederacy, as their cantons (a rough equivalent of US states) held significant autonomy until the mid-nineteenth century. The European Union (EU) is sometimes referred to as having confederate characteristics, as each member state (country) maintains sovereignty but works together to further mutually beneficial policies on behalf of the continent.^[1] Currently, however, no countries utilize a confederate model.

Which Model of Government Has America Experienced?

America has experience with all three models of government. First, the United Kingdom (then Great Britain) held supreme power over its colonies, including the original thirteen American colonies, as part of a unitary system. In the mid- to late eighteenth century, Britain incurred significant debts fighting multiple wars, including the War of Austrian Succession and the Seven Years’ War, more than doubling their national debt.^[2] Britain did not implement an income tax system until after the Revolutionary War, when they were fighting (again) with France. As a result, the primary means of raising revenue relied on tariffs and duties. Britain levied many new taxes on the colonies, such as the Townshend Acts, the Stamp Act, and the Tea Act. While the amount of taxation was relatively modest in many respects, many of these new policies advantaged British merchants and businesses at the expense of the colonies—creating an unfair competitive advantage amid concerns of “no taxation without representation.” Without the ability to vote for their own elected officials, voice their displeasure directly to King George III, or enjoy representation in British Parliament, the colonists agitated for change.

This experience with a perceived tyrannical monarch and unresponsive national government informed how the newly freed colonists chose to set up their first government. Under the Articles of Confederation, the country’s first constitution that governed America from 1781 to 1789, the states created a “league of friendship,” where “each state retains its sovereignty, freedom, and independence and every power, jurisdiction, and right, which is not by this confederation expressly delegated to the United States, in Congress assembled.”

Each state was to be sovereign and had supremacy over the new federal government, which was created to be intentionally weak. The national government bore little resemblance to our current system of government, as there was no president or executive branch and Congress existed of a unicameral (single) chamber, where each state possessed one vote regardless of population. This is in contrast to our current bicameral legislature consisting of the House of Representatives, where representation is based on population, and the Senate, where representation is equal among states. To pass legislation, the legislature required a two-thirds vote—an unthinkable threshold for today’s polarized Congress. To amend the Articles of Confederation, it needed to be unanimous, with all thirteen states voting in agreement.

The federal government was reliant on state governments for funds and was unable to regulate interstate commerce or do much of anything regarding conflicts between the states. States were able to create their own currency, and the federal government was unable to compel states (or their citizens) to pay taxes. Each state was largely left to its own devices to pay off any remaining debts from the Revolutionary War, as documented in “Cabinet Battle #1” from Hamilton: An American Musical.

Figure 2.4 – Hamilton Video
Source: Miranda, Lin-Manuel. “Cabinet Battle #1″ from HAMILTON.” YouTube, 2020. https://www.youtube.com/watch?v=TZ1drFwVT24 / Embedded with the Standard YouTube License.

For example, the state of Massachusetts increased and implemented new taxes by nearly 500 percent. Many residents, especially farmers, were unable to afford these new taxes and had little power to prevent the state from seizing their land upon foreclosure. This led Daniel Shays, a former captain in the Continental Army, to lead an armed insurrection of many fellow soldiers and farmers who were yet to be paid for their service during the Revolutionary War.

Shay’s Rebellion laid bare the fragility and shortcomings of this new government. The federal government was unable to pay its debts. The state was unable to raise a militia and relied on private contributions to end the unrest. After Shay’s Rebellion, two clear responses capture the tension about how to balance too much and not enough government. George Washington wrote that “mankind left to themselves are unfit for their own government.”^[3] Whereas Thomas Jefferson offered that “the tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”^[4] These divergent responses mirror the ensuing debate about whether and how to replace the Articles of Confederation.

How Should the Articles of Confederation Be Replaced?

As a result of the failures of the Articles of Confederation, each state sent representatives to Philadelphia in 1787 with the purpose of revising the document. Instead, they opted to propose an entirely new model of government. The Constitutional Convention sought to provide a new road map for how to find a balance between two divergent experiences: a tyrannical central government with limited opportunities for participation and an impotent central government unable to meet the needs of its citizens.

The founders proposed a new constitution that sought to balance this tension in at least three critical ways. The first method is to ensure a separation of powers—intentionally dividing the power of government across different political institutions. Rather than concentrate power with just a single monarch or with a single body of Congress, the new Constitution created the legislative, executive, and judicial branches as three coequal branches of government.

The second method, closely related to ensuring a separation of powers across the three branches, was to design a system of checks and balances. Each of the three branches of government at the federal level has the ability to affect the workings of the other branch to prevent power from becoming too concentrated with any single institution. For example, the president can veto legislation passed by Congress. Congress can override a presidential veto with a two-thirds vote. The president gets to appoint judges to the Supreme Court, but the Senate has the ability to approve these judges based on their power to advise and consent.

Separation of powers and checks and balances create a tension—they make autonomous government bodies (e.g., a legislature responsible for passing legislation) while also making them dependent on one another (e.g., the president is able to sign or veto said legislation).

All fifty states, as described in Chapter 3, mirror similar concepts of separation of powers and checks and balances in their state constitutions. The third way that the founders sought to balance the tension between excessive democracy and a tyrannical government was by moving from a confederal to a federal system. In many respects, the ensuing fight to ratify the Constitution between the Federalists (who supported ratification) and the Anti-Federalists (who opposed ratification) previews one of the longest-lasting questions that has governed our politics for more than two centuries: What is the right way to think about how the federal government and the states should relate to one another?

In order to ratify the new Constitution, at least nine of the thirteen states needed to approve it. In an attempt to get the state of New York to ratify the Constitution, Alexander Hamilton, James Madison, and John Jay wrote a series of eighty-five essays as The Federalist Papers under the pseudonym “Publius.”^[5] These essays are perhaps the clearest articulation of the different perspectives on how the Constitution improves upon the Articles of Confederation.

In the most famous of these essays, Madison wrote in Federalist #10 about curing the “mischiefs of faction.” In a purely majoritarian system, one faction, or group organized around a common goal, would impose their preferences upon the minority. Madison identifies two ways to cure or control against factions. The first is to limit the causes of factions—namely, liberty. He writes that “liberty is to faction what air is to fire.” As long as Americans are free, it is in our nature to organize among ourselves to identify and pursue common interests. Curtailing liberty is unacceptable to Madison; thus the second way to address factions is preferable. Rather than remove the causes of factions, the solution is to design a system of government that limits the effects or consequences of factions.

The Federalists supported the Constitution because it provided more power to a centralized national government, whereas the Anti-Federalists opposed a strong central government. These opposing camps differed along three important debates all engaged in different respects in Federalist #10.^[6]

The first difference is about how best to understand representation. Anti-Federalists preferred a delegate model of representation. In this approach, elected officials should resemble and be an accurate depiction of what the (majority of) people want. The best way to do this is to have the government closer to the people. Smaller state governments are more likely to resemble and be responsive to their citizens than a larger republic. The Federalists preferred a trustee model of representation. In a representative democracy, elected officials ought to promote the common good rather than simply mirror the passions of a majority. In the words of Revolutionary-era British (Irish) politician Edmund Burke, a “representative owes you, not his industry only, but his judgment; and he betrays, instead of serving you, if he sacrifices it to your opinion.”^[7] By moving away from a confederacy, elected officials will prioritize what is in the best interest of the country—not just their state.

The second difference is about the fear of tyranny. Both the Federalists and Anti-Federalists were concerned about an abuse of power but feared different groups. The Anti-Federalists were afraid of governmental tyranny—specifically, the tyranny of the minority. They feared the country would devolve into an oligarchy, where power would be concentrated in the hands of the few. Even more concerning was that the addition of the executive branch would hinder the people’s ability to govern and could return the country to a monarchy. The Federalists feared tyranny of the majority, or what would occur with mob rule. To prevent a pure democracy or more majoritarian system that was hyperresponsive to the majority, the Constitution included several components adding distance between the people and the government. For example, only members of the House of Representatives were directly elected by the people. Senators were elected by state legislators until the passage of the Seventeenth Amendment, and the president is still elected by the Electoral College to this day.

As for the third difference between the two camps, while both Federalists and Anti-Federalists sought to limit the power of government, they differed on how to best approach this. The Anti-Federalists wanted the Constitution to specifically enumerate the powers available to the federal government. Akin to a confederal system, the Anti-Federalists wanted all powers not specifically mentioned in the Constitution to be the domain of the states. The Federalists preferred flexibility and to give the national government the resources to respond to new or pressing issues. Key provisions, like the necessary and proper clause, gave the federal government the ability to grow beyond what was explicitly enumerated in the Constitution. Ultimately, in order to gather enough support to ratify the Constitution, the Bill of Rights was added, enumerating key limits on the federal government.

What Does the Constitution Say About Federalism?

The word federalism does not appear anywhere in the US Constitution. Yet the tenets of the concept are readily apparent in most of the seven articles or sections of the Constitution. In Article I, Section 8, the Constitution spells out the expressed powers available to Congress—that is, powers that are enumerated or specifically written. The Constitution enumerates seventeen specific powers for Congress, including the ability to collect taxes and regulate commerce that were not specified as part of the Articles of Confederation.

The newly created executive branch was bestowed with only five expressed powers (military, diplomatic, executive, legislative, and judicial), largely concentrated in Article II, Sections 2 and 3. To ensure that too much power is not concentrated in the hands of a single person, Congress holds a significant ability to impact the president’s expressed powers. For example, while the president serves as the commander in chief of the military, Congress has the sole authority to declare war. While the president can make treaties, appoint Supreme Court justices, and veto legislation, Congress has the ability to override a presidential veto or confirm the president’s treaties and appointments via the Senate’s power of advice and consent.

Article III of the Constitution, while noticeably shorter than both Articles I and II, addresses the judicial branch. It provides a framework to govern the relationship between the federal government and the states by vesting “the judicial power of the United States…in one supreme court” (Section 1) and giving the Supreme Court the authority or jurisdiction to be the ultimate arbiter in cases of conflict between states (Section 2). This is an important distinction, as it helps establish that the federal government has supremacy over the state governments.

Article I, Section 8, Clause 18 is called the necessary and proper clause or elastic clause. Congress is given the power “to make all laws which shall be necessary and proper for carrying into execution the foregoing powers.” It is from this clause that the concept of implied powers is derived—that the power is implied or inferred based on other expressed powers.

The classic example of implied powers comes from the Supreme Court case McCulloch v. Maryland (1819).^[8] Article I of the Constitution gives Congress the ability to collect taxes and borrow and coin money. Nowhere in the document, however, is the ability to start a bank enumerated. Yet Congress did indeed charter a bank (twice). In McCulloch, the Supreme Court ruled that Congress’s creation of the bank was constitutional because necessary does not need to mean absolutely necessary or essential, only that it stems from or derives from expressed powers.^[9] This sparked a considerable amount of controversy, including a presidential veto by Andrew Jackson, who believed Congress was exceeding its constitutional power. Opponents of a broad interpretation of the elastic clause argue that Congress is able to collect taxes, borrow money, coin money, and so on without creating a bank. Therefore, it was not necessary according to this point of view.

Reserved powers derive from the Tenth Amendment, which states, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The inclusion of the Tenth Amendment was a compromise between the Federalists, who wanted the federal government to maintain a degree of flexibility, and the Anti-Federalists, who feared too much power becoming concentrated at the national level. As a result of this, states have wide latitude to utilize their police powers—powers to coerce or regulate citizen behavior. Historically, states—not the federal government—were responsible for policy domains like education, health care, criminal codes, and morality.

The Tenth Amendment ensures we maintain our system of federalism, as power is divided between the federal government and the states. This is part of the reason why concurrent powers, powers that belong to multiple levels of government at once, exist. Perhaps the most prominent example of a concurrent power is the ability to tax.

While the first three articles of the Constitution articulate the powers available to the legislative, executive, and judicial branches, the fourth article deals with how states relate to one another and the country as a whole. Article IV, Section 1 is referred to as the full faith and credit clause. It says that states ought to give “full faith and credit” to the “public acts, records, and judicial proceedings of every other state.” Marriage licenses—and the topic of same-sex marriage, specifically—help illustrate this core concept of state relationships. Opposite-sex couples enjoyed recognition of their unions regardless of where the marriage occurred. For example, a couple married in Illinois that relocates to Indiana is still married in the eyes of the state of Indiana. The state recognizes the marriage from Illinois as valid. The couple does not have to “remarry” now that they live in Indiana.

As states began to reconsider their positions as support for same-sex marriage increased, the federal government intervened. In 1996, Congress (controlled by the Republican Party at the time) passed and President Bill Clinton (a Democrat) signed the Defense of Marriage Act (DOMA) into law with significant bipartisan support.^[10] This law codified marriage as a union between one man and one woman. It also allowed states to refuse to recognize same-sex marriages performed in another state.

In 2013, the Supreme Court struck down DOMA in United States v. Windsor.^[11] The Court, however, did not offer Article IV as the reason to strike down DOMA. The Court ruled that the federal government was discriminating against same-sex couples and that marriage was an example of a police power for states, not the federal government, to regulate. This is an important distinction, as public opinion and case law toward marriage equality have changed drastically in the ensuing decades since DOMA was passed. Just two years later, the Supreme Court went even further in Obergefell v. Hodges.^[12] In a 5–4 decision, the Court ruled that states are required to allow same-sex marriages and recognize same-sex marriages performed in other states. The majority opinion argued that bans on same-sex marriage violated citizens’ due process and equal protection rights guaranteed by the Fourteenth Amendment.

While many advances have been made toward LGBTQ+ equality, debates about federalism have the potential to dismantle much of the recent progress made by advocates.^[13] In his concurring opinion in Dobbs v. Jackson, which indicated that the Constitution does not provide women the right to terminate a pregnancy via an abortion, Supreme Court Justice Clarence Thomas went even further than the majority opinion by arguing that the Constitution does not guarantee a right to birth control, interracial and same-sex relationships, or marriages.^[14] These rights or policy areas ought to be the domain of state governments, not federally protected, according to Thomas. Out of fear that the Supreme Court might follow Thomas’s lead and overrule further precedents, Congress passed, and President Joe Biden signed, the Respect for Marriage Act.^[15] The bill, which received bipartisan support in both the House of Representatives and the US Senate, is viewed as a contingency if Obergefell were to be overturned but as a modest improvement over DOMA. While states would be not compelled to recognize same-sex or interracial marriages within their own state, they must give marriages performed in other states full faith and credit.

Article IV, Section 2 of the Constitution is referred to as the privileges and immunities clause. This section of the Constitution is designed to bind the citizens of each state into a single union.^[16] Promoting national unity as a single country rather than just an agreement between states was an important priority for the Federalists. This passage of the Constitution allows citizens to freely engage in interstate travel and prevents states from discriminating against residents of other states.^[17] A good modern example is the significant diversity in state laws related to recreational and medicinal marijuana. As will be discussed in more detail in Chapter 7, states have utilized the initiative to first implement medical marijuana policies before moving on to legalizing recreational marijuana. While marijuana remains federally illegal, almost half of the states have legalized it for recreational purposes. A resident of Indiana is unable to purchase marijuana legally, but if they travel to neighboring Michigan or Illinois, they would be able to do so. Since it is legal in Illinois and Michigan, the behavior is also legal for the nonresidents of these states. However, conflicting court cases are at odds about whether residency requirements to sell marijuana are constitutional or not.^[18]

Article VI, Section 2 of the Constitution speaks to the relationship between states and the federal government. The supremacy clause states that the “Constitution, and the Laws of the United States…shall be the supreme law of the land.” If there is ever a conflict between a state law and a federal law or the US Constitution, the federal government takes supremacy over state governments.

As described, twenty-four states have legalized marijuana for recreational purposes, and thirty-eight have legalized medical marijuana as of July 2024. The Drug Enforcement Agency and the federal government, more broadly, have not intervened; state laws legalizing marijuana for recreational purposes are in conflict with existing federal law.^[19] While the Biden administration proposed moving marijuana from a Schedule I to a Schedule III drug, it remains illegal at the federal level.^[20]

With perhaps the exception of the Sixteenth Amendment, which gave Congress the ability to collect income taxes, no new expressed powers have been added to the Constitution. The Bill of Rights, the first ten amendments to the Constitution, was a prerequisite necessary to ensure it was ratified by at least nine states. These amendments were viewed as further protection against encroachment from the federal government. Utilizing a process called selective incorporation, the US Supreme Court has applied each of these amendments on a case-by-case basis to also be applicable to each of the states.

Yet the power of the federal government has grown considerably over the past two hundred years. Without a clear expansion of expressed powers, a constant tension between implied and reserved powers exists between states and the federal government. Outside of national security interests, few policy domains are exclusively the purview of the federal government. Nor are there many public policies that are exclusively addressed at the state and local levels. Today’s federalism is marked by the interconnected and interdependent relationship between states and the federal government.

How Has Federalism Changed Over Time?

Political scientists typically think of how federalism has changed by dividing time periods into different eras.^[21] This first era of federalism is called dual federalism, often called “layer cake” federalism. As Figure 2.12 depicts, each layer (or level of government) is distinct and separate. The federal government was responsible for building a national infrastructure to promote commerce. This involves both foreign affairs and work with the Indigenous population. The Tenth Amendment ensured that the majority of work was done at the state level.

The founding era is marked by conflict between two diametrically opposed views. As previously described, the Federalists advocated for a stronger federal government holding supremacy over the states. The Anti-Federalists wanted as much power as possible to remain with states and local governments. Politics for much of the last more than two hundred years has mirrored this debate between whether more power should be with the federal government or the states.

The first two presidential administrations of George Washington (even though he was not a member of a political party) and John Adams helped establish an energetic and expanding national government. Chief Justice John Marshall, arguably one of the most important and powerful Supreme Court justices who served our country, helped usher in a series of landmark decisions like McCulloch v. Maryland and Gibbons v. Ogden that provided the federal government sufficient flexibility to expand the utilization of the necessary and proper clause and commerce clause, respectively.^[22]

In spite of this foundation that established national supremacy, much of our country’s early history is characterized by states doing the bulk of the governing. The Washington and Adams administrations were followed by a series of Democratic-Republican presidencies (Jefferson, Madison, Monroe). This “Era of Good Feelings” was ushered in as the Federalist Party collapsed and partisan tensions declined so much that President James Monroe ran virtually unopposed for reelection in 1820.

In the 1830s, John Marshall was followed as chief justice by Roger Taney, who possessed a broad understanding of the Tenth Amendment and was a fervent supporter of states’ rights, the belief that power belongs with the states amid federal encroachment. ^[23]Similar to Taney, John C. Calhoun, who served as vice president under President Andrew Jackson and as a senator from South Carolina, thought the Tenth Amendment gave the states significant latitude. The idea of nullification, or that states held the power to reject or ignore federal legislation if they felt it was unconstitutional or objectionable, is most often associated with Calhoun. While the view of the Federalists (or nationalists) largely prevailed over the views of Taney or Calhoun, states still enjoyed considerable autonomy for the first century and a half of the country’s history.

Dual federalism is the longest era, lasting from the founding until the early twentieth century. When the Great Depression hit and destabilized the world economy in the late 1920s and 1930s, almost one out of every four Americans was unemployed, and many more struggled to make ends meet.^[24] Republican President Herbert Hoover remained steadfast that the federal government had little role to play and was unwilling to mobilize national resources to address these pressing problems. Many Americans who lost their homes migrated, looking for work, and settled into “Hoovervilles,” or makeshift camps named after the president and his lack of intervention. The 1932 election of Franklin Delano Roosevelt over Hoover marked the end of dual federalism as the federal government implemented a series of new social programs aimed to alleviate suffering known as the New Deal.

The rise of Roosevelt’s New Deal policies reflects a clear shift into the second era of federalism called cooperative federalism, also known as marble cake federalism. Unlike a layer cake, where the levels of government remain separate, the federal government and the states become more interdependent. The New Deal policies created an unprecedented level of new agencies and programs that attempted to address many pressing challenges, such as fighting unemployment, poverty, and homelessness.

Three notable programs that were started during this era include unemployment insurance, Social Security, and Aid to Families with Dependent Children (AFDC). The federal government dispersed money to the states to provide financial support to those seeking and unable to find jobs, disabled and retired Americans, and families living in poverty. These programs are examples of categorical grants, where Congress allocates money to the states on the condition that states utilize the funds to carry out specific programs.

States still maintained a great deal of flexibility and autonomy after the New Deal. As a result, the fifty-state landscape exhibited significant diversity—simultaneously a strength and weakness of federalism to be discussed momentarily. In particular, the blatant discrimination faced by African Americans in the South led many to question whether states, left to their own devices, would provide for their citizens. In the 1960s, the relationship between the federal government and the states moved into an era known as regulated or coercive federalism.

Continuing the legacy of Roosevelt’s New Deal, President Lyndon B. Johnson sought to promote a “Great Society” through a series of initiatives focused on education, social welfare, and civil rights. This included a slew of new federal policies and programs like Medicare and Medicaid as well as the Civil Rights Act of 1964 and the Voting Rights Act of 1965.

No longer was the promise of federal money enough to incentivize state participation in federal programs. In addition to providing financial support, the federal government implemented more top-down standards that states were expected to follow. While no cake metaphor exists for the third era of federalism, to continue the use of food imagery, the federal government increasingly was using a stick (penalties) in addition to the carrot (funding). While many critics felt the federal government overreached, one skeptic noted, “The federal government has not encroached on state government. State government has defaulted.”^[25]

The increase in the size and scope of the federal government produced an inevitable backlash as conservatives enjoyed considerable success railing against the problem of “big government.” Under the administration of Republican Presidents Richard Nixon and Ronald Reagan, the country was ushered into an era of New Federalism. New Federalism is characterized by the process known as devolution, where the federal government returned or delegated authority to state and local governments.

Figure 2.15 – Ronald Reagan’s Inaugural Address
Source: “Reagan: Government Is Not the Solution to Our Problem Government IS the Problem.” Inaugural Address 1981. YouTube, 2009. https://www.youtube.com/watch?v=6ixNPplo-SU / Embedded with the Standard YouTube License.

A key aspect of devolution is changing the funding mechanism for many federal programs from categorical grants to block grants. Rather than giving funds that states must spend on specified programs, block grants provide states significant autonomy and flexibility in how they spend federal resources. In 1996, Bill Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act, a major welfare reform act. In doing so, Clinton said he was going to “end welfare as we know it.” It replaced the categorical grant for AFDC with a block grant program called Temporary Assistance for Needy Families (TANF). States were able to utilize funds for cash assistance, job training, childcare, and other social welfare needs. Initially, this flexibility led to clear partisan divisions as states controlled by the Democratic Party spent significantly more of their TANF funds on cash assistance than states controlled by the Republican Party.^[26] Today, that partisan pattern is less noticeable, as each state has the autonomy to identify how best to utilize these funds, with many deprioritizing direct cash assistance. For example, Illinois ranked fiftieth, spending just 4 percent of TANF funds on cash assistance ($45 million) in 2021, whereas neighboring Wisconsin spent $82 million, or 15 percent of their funds, on direct cash assistance.^[27]

The increased reliance on block grants is also associated with the federal government providing less funding for many of the same programs compared to prior years. The changing relationship between the federal government and states also led to a rise in accusations regarding unfunded mandates, where the federal government introduced a new standard or requirement for states to meet without providing the necessary and sufficient levels of funding.^[28] Frequently pointed-to examples include the Americans with Disabilities Act and No Child Left Behind.^[29]

How Would You Describe Our Current Era of Federalism?

These four eras (dual, cooperative, regulated, and New Federalism) are generally agreed upon, but no consensus exists as to whether the relationship between the federal government and the states still fits within New Federalism or whether we have moved into a new era. This is due in part to the idiosyncratic and dysfunctional nature of American politics over the last twenty to thirty years.^[30]

Politics since the 1990s is perhaps best characterized as being highly polarized and nationally competitive. Starting with the 1994 elections, party control of the House of Representatives and US Senate has changed hands five and six times, respectively. In the thirty years prior (1964–1994), Democrats controlled the US House of Representatives exclusively, and the Senate alternated only twice. Meanwhile, the two parties have also shared the presidency, as Democrats have controlled the White House 60 percent of the time compared to 40 percent for the Republicans over the last thirty years.

The federal government has implemented significant new national programs under both Republican and Democratic administrations in recent years. During Republican George W. Bush’s presidency, Congress passed many significant pieces of federal policy, including those related to education policy (No Child Left Behind), the war on terror (the PATRIOT Act and creation of the Department of Homeland Security), and the initial response to the 2008 Great Recession (Troubled Asset Relief Program). During Democrat Barack Obama’s presidency, he continued the federal government’s active involvement to end the recession (the American Recovery and Reinvestment Act and bailing out the auto industry) and expanded the role of the federal government in health care (the Affordable Care Act). During both types of administration, the US Supreme Court issued decisions enabling the federal government to consolidate power and also made decisions giving more power back to the states.

Likewise, both parties have sought to take advantage of the opportunities to innovate at the state and local levels as the need arises. While many typically associate support for a stronger federal government with a Democratic perspective today, Democrats have sought to pursue federal policy when in power but utilize the states to attain policy innovation, especially during periods when Republicans control Congress or the White House, as part of what some call “progressive federalism.”^[31]

States are able to marshal their resources to oppose the federal government. This has been referred to as “uncooperative federalism”—a dynamic increasingly at play during the presidencies of Barack Obama, Donald Trump, and Joe Biden.^[32] States are not innocent bystanders but active collaborators and opponents of the federal government. Others have called this a patchwork system where polarized parties and institutions navigate the varying levels of government to enact “partisan federalism” or “fragmented federalism.”^[33] At the federal level, increasing polarization and gridlock have provided states with an opportunity to govern in a more partisan direction without much opposition.

Forty of the fifty states are currently state government trifectas, where one political party controls both chambers of the state legislator and the governorship.^[34] More than 82 percent of all Americans live in a state where a single party is largely unchecked to pursue their desired public policy. This also makes the process of policy diffusion easier, as states and local governments are influenced by and adopt the policies of nearby jurisdictions.

This partisan conflict has extended to local levels of government as well. Local governments are not featured in the US Constitution and are under the purview of states and their respective constitutions. Within that, local governments are established under two general frameworks. The first is known as Dillon’s Rule, which gives local governments the ability to create policies only in areas specified by their state government. The second framework is home rule, where state governments provide local governments wide latitude to enact policies.

While many typically associate support for local control with a Republican perspective today, Republican state governments are much more likely to prevent local governments from controlling public policy.^[35] This process is known as preemption, when a larger government seeks to nullify the policies or remove the decision-making authority of a smaller government. Both parties utilize preemption at the federal level, taking power away from the states, when it helps further their own interests.^[36] At the state level, however, Republicans are much more likely to preempt local governments (especially large urban cities, generally controlled by Democrats) across a wide range of public policies, including gun control, transgender rights, school curriculum, and tax policy.^[37] For example, states prevent municipalities from raising their minimum wage, implementing gun-free zones, allowing individuals to use the bathroom that matches their gender identity, and so on.

What Are the Strengths and Weaknesses of Federalism?

The COVID-19 pandemic taught many Americans some valuable lessons, but it also highlighted many of the strengths and weaknesses inherent in federalism.^[38] During the pandemic, the federal government was able to mobilize national resources to the states, create and distribute an influx of capital as stimulus checks, and marshal the necessary resources for the widespread dissemination of a vaccine. At the same time, the global lockdown shuttered the economy, competition between states for personal protective equipment (PPE) led to supply shortages and skyrocketing prices, and voters struggled to hold politicians accountable amid endless finger-pointing.

The gravity of the pandemic highlighted many of these trade-offs for American voters, but how they assess the strengths and weaknesses of federalism are not unique to the coronavirus. This balancing act is true in policy areas such as education, social welfare, environmental regulations, and so on. Comparing federalism to unitary or confederal systems of government reveals many similar themes of strengths and weaknesses.^[39] They mirror many arguments about the virtues and drawbacks of giving more power to the national government or reserving power to the states. The following paragraphs illustrate four points and counterpoints frequently made about federalism.

The first major strength of federalism is that it promotes innovation. Supreme Court Justice Louis Brandeis called states laboratories of democracy. He wrote, “It is one of the happy accidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”^[40] Many federal policies start off as state policies. The Affordable Care Act (Obamacare) is based on a policy from Massachusetts. Our current welfare program, TANF, utilizes a Wisconsin policy as its basis. Sometimes, states are well ahead of the federal government, such as Wyoming, which granted women the right to vote more than fifty years before the ratification of the Nineteenth Amendment.

On the other hand, Judge Brandeis also identified that the flexibility states possess to innovate also puts them in competition with one another, often leading to a “race to the bottom.”^[41] While many think of competition as a net positive, it also has the potential to lead to negative consequences. For example, after AFDC was replaced with TANF (and the program was changed from categorical grants to block grants), states gained greater flexibility and control over their programs. As a result, states reduced the level of benefits they provided to families living in poverty.^[42] This concept applies to states competing against one another to provide the lowest level of labor and environmental protections, attract businesses via tax incentives, and even incentivize professional sports teams to relocate to their state.

Another strength of federalism is that it promotes flexibility. Rather than a “one-size-fits-all” approach that would occur in a unitary model (or under a stronger federal government), federalism gives state governments the ability to develop and implement policies closer to the preferences and needs of their citizens. For example, the minimum wage is established at the federal level at $7.25 per hour, but thirty-four states currently have minimum wages higher than the federal floor. Given that the cost of living is different across the states, this system of government allows states to respond to the economic reality of their states, so a state like Washington can have a minimum wage as high as $16.28 per hour.^[43]

The ability that states possess to develop policies closer to the preferences of their citizens, however, neglects the increasing interconnectedness of the fifty states and the broader global community. This concept is referred to as “spillover.” Markets are becoming more, not less, global as advances in technology and communication increasingly make states interdependent upon one another. Issues such as a public health crisis, like the coronavirus, or pollution do not adhere to state boundaries. If Illinois passes stringent antidumping policies in the Mississippi River, the policies of Minnesota, Wisconsin, and Iowa will affect Illinois, regardless. Few policy areas have consequences that are confined to a single state.

A third argument made in favor of federalism is that it provides a “school of their citizenship.” Federalism, it is argued, provides more opportunities to practice democratic citizenship and responsiveness. Americans have the opportunity to participate in local, state, and federal elections. Even with the size of the country, many Americans have access to at least one level of government that is likely to be responsive to their needs. In a unitary or confederal model, citizens would be subject solely to whether they agree with the current ruling power. Today, many rural Americans are represented by Republican politicians—even if they live in a Democratic state or if Democrats control the federal government. Vice versa, many urban Americans are represented by Democratic politicians and feel some degree of representation even if they live in a Republican state or if Republicans control the federal government.

However, this introduces a great deal of complexity for most Americans unable to navigate the nuances of federalism. Unitary models of government benefit from simplicity and uniformity. In the United States’ federalist model, we have more than ninety thousand units of government (e.g., states, counties, cities, school districts). This has the potential to create confusion and hinder democratic accountability. For example, which level of government is responsible for education policy? The national government and the US Department of Education? State governments and bureaucrats? Local school boards? In federalism, each of these levels of government has an important role to play. This makes it more challenging to hold any individual elected official responsible for education policy. In a unitary model, something more similar to a “one-size-fits-all,” top-down approach ensures that policies look similar across communities and that standards are not dependent on geography.

A fourth argument made in favor of federalism compared to other models of government, specifically unitary systems, is that it is better able to limit government and preserve personal liberties. Dividing powers, by the Constitution (and the Tenth Amendment, specifically), ensures that too much power is not concentrated at the federal level. However, a federalist system also ensures that too much power is not concentrated in the hands of states or local governments. By codifying a power-sharing agreement between governments and putting additional protections in place, like separation of powers and checks and balances, liberty is better protected. The Bill of Rights ensures that core, inalienable rights are protected from intrusion.

Yet federalism (like a confederal system) creates the potential for the government to discriminate against its citizens. The American South, in particular, disenfranchised and stripped African Americans of their rights for generations. Today, many states are leading the charge in discriminating against their citizens based on sexual orientation and gender identity. While not as blatant as in the past, states create policies discriminating against racial and religious minorities. As Madison warned in Federalist #10, state governments possess more ability and opportunities for the “tyranny of the majority.”^[44]

True to its definition, power is shared within federalism. It is imperfect, but it is far from static. The “promise and practice of federalism are frequently at odds.”^[45] As the first 250 years of this experiment have shown, change is one of the few constants.